IFA. Worth the fee and what am I getting into?
Discussion
Pretty much as the title really. Recent downsize of JS Towers has liberated a six figure sum that's been transferred and left in our current account as we have no idea what to do with it.
There's nothing we need to spend it on and we'd like to use the capital to somehow generate a income. We'd also like to invest some for our grandson. Obviously we need some advice on how best to do that and one option is to pay for it. Question is - do the fees charged by an IFA actually justify the cost in improved returns and if we do go down the IFA route how can I ensure I'm not getting into any long term commitment that'll end up costing more in ongoing fees and charges than the sum would earn if I just let the bank invest it?
Completely clueless when it comes to making money go to work for you rather than you going to work for it and don't want to look back and realise we've been screwed.
Any thoughts appreciated.
There's nothing we need to spend it on and we'd like to use the capital to somehow generate a income. We'd also like to invest some for our grandson. Obviously we need some advice on how best to do that and one option is to pay for it. Question is - do the fees charged by an IFA actually justify the cost in improved returns and if we do go down the IFA route how can I ensure I'm not getting into any long term commitment that'll end up costing more in ongoing fees and charges than the sum would earn if I just let the bank invest it?
Completely clueless when it comes to making money go to work for you rather than you going to work for it and don't want to look back and realise we've been screwed.
Any thoughts appreciated.
Ginge R said:
Steve,
You've reached your dotage so congratulations! lol
You might not even need advice. If you want to set aside money for the next but one generation, that in all honesty, won't require (certainly, expensive) input; that's more a fire and forget tactic. If you want income for yourself with absolutely no exposure to capital risk you might like the idea of a new pensioner bond (albeit it comes at the end of the fixed period) and possibly a personal pension for you and a partner (depending on your situation with other pensions). The new legislation surrounding triviality is well worth looking at, but that depends on what you've done with your other wealth.
Most credible IFA will ensure that they don't whittle your pot away for their own betterment and to your detriment, but get the big picture right first. The cost will depend on your personal circumstances and how tightly defined you want the advice to be. The one good thing about the Retail Distribution Review has been that insanely expensive old skool and many of the (ahem) national chain tariffs have been exposed or pared down to something far more realistic and reasonable. Investment advice is far more comparable now, to legal or accounting advice. If your needs are modest, why pay a fortune for expensive accounts or a complicated will?
To give you an idea, I'm working on a streamlined service which will operate on a fixed fee basis and involve people interacting with me as they might, their insurance company. That fixed fee is going to be in the low hundreds, whatever the amount and will rely on punchy and prompt feedback from the client to make it work, I'm modelling it at the moment. The challenge is, for me in the philosophical sense anyway, to prevent those who don't have a lot from (effectively) cross subsidising those who do. I'm working on the idea of deferred or simply canceled fees for start out investors and clients but it's a bit of a regulatory minefield. I have even considered setting aside money for a pro bono pot. There is an advice gap, young people especially want to start investing for their futures now but they mustn't lose all their future growth in fees.
Good luck, my instinctive advice would be to completely forget it over the festive period and wait for the New Year to die down and then address it. It's taken you decades to grow it, a month or three more won't make much difference! Have a great downsized xmas.
Thanks for that - you've put things in perspective a bit. You've reached your dotage so congratulations! lol
You might not even need advice. If you want to set aside money for the next but one generation, that in all honesty, won't require (certainly, expensive) input; that's more a fire and forget tactic. If you want income for yourself with absolutely no exposure to capital risk you might like the idea of a new pensioner bond (albeit it comes at the end of the fixed period) and possibly a personal pension for you and a partner (depending on your situation with other pensions). The new legislation surrounding triviality is well worth looking at, but that depends on what you've done with your other wealth.
Most credible IFA will ensure that they don't whittle your pot away for their own betterment and to your detriment, but get the big picture right first. The cost will depend on your personal circumstances and how tightly defined you want the advice to be. The one good thing about the Retail Distribution Review has been that insanely expensive old skool and many of the (ahem) national chain tariffs have been exposed or pared down to something far more realistic and reasonable. Investment advice is far more comparable now, to legal or accounting advice. If your needs are modest, why pay a fortune for expensive accounts or a complicated will?
To give you an idea, I'm working on a streamlined service which will operate on a fixed fee basis and involve people interacting with me as they might, their insurance company. That fixed fee is going to be in the low hundreds, whatever the amount and will rely on punchy and prompt feedback from the client to make it work, I'm modelling it at the moment. The challenge is, for me in the philosophical sense anyway, to prevent those who don't have a lot from (effectively) cross subsidising those who do. I'm working on the idea of deferred or simply canceled fees for start out investors and clients but it's a bit of a regulatory minefield. I have even considered setting aside money for a pro bono pot. There is an advice gap, young people especially want to start investing for their futures now but they mustn't lose all their future growth in fees.
Good luck, my instinctive advice would be to completely forget it over the festive period and wait for the New Year to die down and then address it. It's taken you decades to grow it, a month or three more won't make much difference! Have a great downsized xmas.
BTW although the kids think I'm antique I'm in my early 50's... So the pensioner bond aint gonna work
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